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of <h1>Appeal dismissed on rejected Section 9 application due to genuine dispute on operational debt.</h1> The Tribunal dismissed the appeal challenging the Adjudicating Authority's rejection of a Section 9 application due to a genuine dispute raised by the ... Rejection of application filed u/s 9 of IBC - existence of dispute - relevancy of settlement entered into between the parties on 19.03.2018 - all dues prior to that stood paid and there were only two invoices after the said date and dispute has been raised regarding them - Operational Creditors - HELD THAT:- The Demand Notice was issued on 19.05.2019 was received by the Corporate Debtor on 23.05.2019 and reply to the Demand Notice was sent on 27.05.2019, which is part of the Section 9 application of the Appellant, appearing at page no.298 of the paper book. The Corporate Debtor in the reply to the Demand Notice has refuted the claim of the Appellant as frivolous and baseless. The Corporate Debtor in the reply has given details of the work and the minutes dated 02.02.2018 and agreement which was entered on 10.02.2018 and signed on 19.03.2018. With regard to invoices which were issued subsequent to agreement between the parties’ details have been given by the Corporate Debtor. It was pleaded that the Operational Creditor was obliged to issue Credit Notes with regard to amount of Rs.12,58,782/-, which was never issued. With regard to settlement which was forwarded by the Corporate Debtor it has been pleaded in the reply that settlement was withdrawn subsequently by Corporate Debtor and the Operational Creditor owes an amount to the Corporate Debtor. When Demand Notice issued under Section 8 is replied by the Corporate Debtor, which is notice of dispute raising the dispute regarding claim of the Appellant, the Adjudicating Authority has rightly not proceeded to admit the Section 9 application - Details which were reflected in the reply to notice of demand clearly indicate that there was genuine dispute regarding the claim of the Appellant, which cannot be decided in a Section 9 proceeding. There are no fault with the order of the Adjudicating Authority rejecting Section 9 application - appeal dismissed. Issues:The judgment involves the dismissal of a Section 9 application by the Adjudicating Authority, based on a dispute raised by the Corporate Debtor regarding the Operational Debt claimed by the Appellant.Summary:Issue 1 - Settlement Date Relevance:The Appellant claimed Operational Debt of Rs.97,03,395 post a settlement date of 19.03.2018, which was contested by the Corporate Debtor. The Adjudicating Authority rejected the application citing settlement between the parties and only two invoices post the settlement date.Issue 2 - Dispute Acknowledgment:The Appellant argued that a settlement forwarded by the Corporate Debtor acknowledged the debt, contradicting the rejection of the Section 9 application by the Adjudicating Authority.Issue 3 - Arbitration Proceedings:The Respondent highlighted that the issues were already under adjudication in an Arbitration Proceeding initiated by the Corporate Debtor.Upon review, the Tribunal found that the Demand Notice and subsequent replies indicated a genuine dispute raised by the Corporate Debtor regarding the Appellant's claim. The Adjudicating Authority's decision to reject the Section 9 application was deemed appropriate as the dispute could not be resolved in that proceeding. The Tribunal clarified that the rejection did not prevent the parties from settling their dispute through other appropriate means, and hence, the Appeal was dismissed.
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